Apple exposed its complete lack of interest in building a stripped down, voice-only iPhone or a Mac-based netbook during its fiscal first quarter conference call Wednesday afternoon.

No iPhone nano

In response to analyst questions on iPhone pricing, Tim Cook, Apple's acting chief executive, stated, "We are now in over 70 countries with the iPhone and you're correct, some of them are non-subsidized markets. Â*Examples are, the largest is in terms of size of the market, our sales are clearly materially less in those markets than they are in the subsidized markets with contracts. Â*We are constantly evaluating the best way to play in these markets. Â*We know there's a huge opportunity here, and we will make adjustments in the future there to play in a better way."

Cook also destroyed the speculation around an "iPhone nano," saying, "You know us, we're not going to play in the low-end voice phone business.Â*That's not who we are. That's not why we're here. We'll let somebody do that, our goal is not to be the unit share leader in the phone industry. It is to build the best phone."

Steve Jobs made similar remarks during the last quarterly conference call in October. When asked why Apple only has one product offering in the vast smartphone market and what further opportunities for innovation or "other market opportunities within that market" Apple might have, Jobs replied, "I wasn't alive then, but from everything I've heard, Babe Ruth only had one home run. He just kept hitting it over and over again.

Jobs added, "I think that the traditional game in the phone market has been to produce a voice phone in a hundred different varieties. But as software starts to become the differentiating technology of this product category, I think that people are going to find that a hundred variations presented to a software developer is not very enticing. And most of the competitors in this phone business do not really have much experience in a software platform business."

"So we're extremely comfortable with our product strategy going forward, and we approach it as a software platform company, which is pretty different than most of our competitors."

No Mac netbook imminent

Asked about the sub-$500 netbook market, Cook answered, "We're watching that space, but right now from our point of view, the products in there are principally based on hardware that's much less powerful than we think customers want, software technology that is not good, cramped keyboards, small displays."

Cook added, "We don't think people will be pleased with those products. It's a category we watch, we've got some ideas here, but right now we think the products are inferior and will not provide an experience to customers they're happy with."

Again, Jobs made very similar comments on the prospects for a netbook from Apple during the last call. "As we look at the netbook category, that's a nascent category. As best as we can tell, there's not a lot of them being sold," Jobs said.

"You know, one of our entrants into that category if you will is the iPhone, for browsing the Internet, and doing email and all the other things that a netbook lets you do. And being connected via the cellular network wherever you are, an iPhone is a pretty good solution for that, and it fits in your pocket.

"But we'll wait and see how that nascent category evolves, and we have got some pretty interesting ideas if it does evolve," Jobs said.

I suppose all the people who install OS X on their Netbooks (and some struggle to do so!) doesn't mean there is a market. I counted 5 people on the train this morning with netbooks with OS X installed! That's gotta mean something, right?

Ah well... so much for that idea. Hackers can keep their night jobs I guess. Gotta keep it fun for some folks.

Asked about the sub-$500 netbook market, Cook answered, "We're watching that space, but right now from our point of view, the products in there are principally based on hardware that's much less powerful than we think customers want, software technology that is not good, cramped keyboards, small displays."

Cook added, "We don't think people will be pleased with those products. It's a category we watch, we've got some ideas here, but right now we think the products are inferior and will not provide an experience to customers they're happy with."

I suppose all the people who install OS X on their Netbooks (and some struggle to do so!) doesn't mean there is a market. I counted 5 people on the train this morning with netbooks with OS X installed! That's gotta mean something, right?

Ah well... so much for that idea. Hackers can keep their night jobs I guess. Gotta keep it fun for some folks.

they didn't say they would never release one.. there just won't be one coming this quarter. He did say.."We're watching that space". They want to be sure it's not just a fad before they pursue it and I don't blame them. Personally I wouldn't invest in a netbook, I would invest in a macbook pro first. I do need to do mixing with LogicPro and a netbook won't cut it. to me.. the handheld field is potentially greater than any netbook field.

After seeing older people struggle with the small keys and controls on current chocolate-bar phones (particular without their reading glasses), I wonder whether an iPhone would not be much easier for them. One button to lock, very easy and self-explanatory unlock (slide), large keypad. They might only use the Phone and Addressbook part (and maybe receiving SMS) but I think it would be much easier to operate for them then current phones.

In response to analyst questions on iPhone pricing, Tim Cook, Apple's acting chief executive, stated, "We are now in over 70 countries with the iPhone and you're correct, some of them are non-subsidized markets. *Examples are, the largest is in terms of size of the market, our sales are clearly materially less in those markets than they are in the subsidized markets with contracts. *We are constantly evaluating the best way to play in these markets. *We know there's a huge opportunity here, and we will make adjustments in the future there to play in a better way."

Translated from AppleSpeak: "We will cut the price of iPhone to $99 in the US and lower pric appropriately in other markets". At least in the US, it would be a lot more effective if Apple can convince AT&T to offer $20/month data service plan for iPhone by reducing the subsidy payments Apple is receiving from AT&T per iPhone sold.

Asked about the sub-$500 netbook market, Cook answered, "We're watching that space, but right now from our point of view, the products in there are principally based on hardware that's much less powerful than we think customers want, software technology that is not good, cramped keyboards, small displays."

Tranlated from AppleSpeak: "Apple will offer a "premium" NetBook soon at slightly above the $500 price point.". It is likely that Apple will offer a display with higher resolution (similar to the new HP 2140) instead of the 1024x600 LCD found in many low-end NetBooks. It is also likely that the Apple netbook will be based on a dual core Atom with the new NVidia chipset.

Of course, Apple will claim that the new Apple netbook is not a "netbook"...

Doesn't this sound that Apple would indeed release something into that space that would have powerful hardware, great software, a full sized keyboard, and a large display?

aka a cheaper Macbook Air?

that is very likely exact where Apple is going. as the prices for the bits and pieces go down, thus goes the cost of the machine. so either they will go down in price or seriously up in ability. either way is a potential win.

Quote:

Originally Posted by macshark

At least in the US, it would be a lot more effective if Apple can convince AT&T to offer $20/month data service plan for iPods by reducing the subsidy payments Apple is receiving from AT&T per iPhone sold.

carrier provided data on an ipod? that's called an iphone.

i think what you meant to say was that it would be more effective if Apple and ATT could work out a cheaper data plan with perhaps a return to the free texts (especially given allegations that outside of a handful of non stop texting freaks, the carriers are making hand over fist on text plans). given that the high monthly costs are a bigger issue than the unit price for many

"You know us, we're not going to play in the low-end voice phone business.*That's not who we are. That's not why we're here. We'll let somebody do that, our goal is not to be the unit share leader in the phone industry. It is to build the best phone."

That's exactly what they said about low-end flash-based iPods.

I'm not sure if there's a analogous solution with a smaller screen, but it should be noted that Apple often slams a market before entering it themselves shortly thereafter.

Sales would have been much better in the desktop machines had Apple not been so sloppy in the updates for them, overall good results.

Yeah, where are those quad-core iMacs?

Also, Apple may be waiting for the new Core i7 Xeons to update the PowerMacs, but not changing the price since introduction while the essential component costs dropped by more than 50% (processor, memory, HD) was probably a mistake...

i think what you meant to say was that it would be more effective if Apple and ATT could work out a cheaper data plan with perhaps a return to the free texts (especially given allegations that outside of a handful of non stop texting freaks, the carriers are making hand over fist on text plans). given that the high monthly costs are a bigger issue than the unit price for many

I'm not sure if there's a analogous solution with a smaller screen, but it should be noted that Apple often slams a market before entering it themselves shortly thereafter.

It also doesn't actually even rule out an iPhone nano either since the last solid rumour for such a device was indicating that it might be a smaller, hobbled version of the same iPhone specifically targeted at emerging and non-subsidised markets.

This would fit rather nicely with Tim's wording about how the non-subsidised markets are difficult, that they won't make a "low end" phone, but that they had some other ideas about how to get into that market. iPhones with enough stuff cut out (for non-3G networks in particular), could easily get cheap enough for China, India, etc. and they might be physically smaller as well.

I don't see this news as actually "ruling out" an iPhone as the AppleInsider headline indicates.

In Windows, a window can be a document, it can be an application, or it can be a window that contains other documents or applications. Theres just no consistency. Its just a big grab bag of monkey...

I still maintain, as with all slick and feature-rich technology in a smaller form factor, it will command a Higher selling price.

I do not understand why this is so difficult to comprehend.
If Apple is working on an iPhone Nano, will ALL the functionality of the current 3G, Plus it's super thin and smaller, why does everyone expect this will sell for less than $199.00

I would expect it would sell for $399 or higher.

This is EXACTLY how Apple pushes the industry.

Apple would have bragging rights, like with the Mackbook Air.
"Smallest, Thinnest, Smartphone, with All the functionality and more of the current 3G"

I don't understand the reasoning behind the iphone nano being a low end part of the market. There are plenty of expensive small phones out there and the market is dying for a touch phone that is not smart phone oriented but more multimedia oriented. Size is an issue and having a small phone with GOOD software like stated above would be the holy grail.

The iPhone as it stands is a bit big in size to be perfectly honest. The screen and touch abilities of it has alot to do with that but many people make do with a smaller screen on their phones. I suppose I'm personally saying I want a smaller version of the iphone without it losing any functionality

I don't really see the point in a Netbook for Apple anyway - isn't that what the iPhone is for?

In some respects, netbooks are really small, iPhone is ridiculously small. Note books and phones are polar opposites of the portable device spectrum, something in between can be nice to have.

In others, I really don't think iPhones can really replace what a netbook can do. The form factor is very different and fits different uses. Netbooks can operate regular desktop software without changes. I think they're mostly machines for people that need a machine to run desktop software but need to carry them a lot more than they actually use them, because carrying something for hours at a time can be fatiguing.

I hope Apple can somehow find a way to satisfy this market if it's a market that is here to stay, and can do it in a way that doesn't undercut their regular notebooks needlessly.

Quote:

Originally Posted by bbjai

I don't understand the reasoning behind the iphone nano being a low end part of the market. There are plenty of expensive small phones out there and the market is dying for a touch phone that is not smart phone oriented but more multimedia oriented. Size is an issue and having a small phone with GOOD software like stated above would be the holy grail.

It may be a misdirection on Tim Cook's part to say Apple isn't going to be making a low end phone, I agree that a more compact iphone isn't going to be much less of a premium device than the regular one is.

First of all, it's important to note that the next version of the Mac OS will be leaner, more efficient and that bodes well for any future Apple version of a computer in the netbook space. There is a limit to what can be done with hardware, though that, too, will improve as the months move along. But if the OS is made significantly more efficient, that's a very good way of extracting more performance out of a netbook device, keeping in mind, also, that there will be less storage on such a device, making it all the more important for the OS to have a reduced footprint.

Apple has a history of bringing products to market when they are ready and not a second before. It's not just about making a better product than the competition. It's about gaining the trust of consumers. If sales of Apple laptops are good now it's because of all those younger buyers who enjoyed using their ipods. In other words, in addition to the ipod being the best portable music device on the market, it also improved Apple's reputation with a very important demographic.

On another front, in regards to Apple's desktops, they are all way, way overdue for a makeover. That combined with the impending release of a new OS means a lot of potential Apple desktop buyers are waiting for the new systems. I don't doubt that within the next few months if not this quarter then the next one there will be new iMacs, minis, and pro desktops. And the OS is also due shortly.

My guess is we'll see the current desktop redesigns first, followed shortly by the OS which may or may not come to market in tandem with Apple's version of a netbook. That schedule will keep everyone interested and before you know it we'll be due for the next batch of ipods.

I'm guessing all the new stuff will be unleashed before Mr. Jobs re-emerges if only to prove a point, namely that Apple is bigger than Jobs. The biggest concern holding the stock back has to be worries that if Jobs goes, the magic goes with him. What better way to dispel that notion than to re-do all the desktops, the OS, and enter the netbook space before Jobs has stepped back into the picture. Or maybe as a bit of showmanship in June Apple could launch the OS, initially minus Jobs, and cap off the event by having him hit the stage with one more thing, i.e. the netbook. It's got Jobs written all over it. I can hardly wait.

I just bought an HP Mini 1000 netbook for ~$400. I would have gladly paid $550 for a 10 inch "Macbook Mini" for $525.

I have no doubt that Apple could make a nice netbook for $525. Take the shell of a white macbook, put in a 10.5" screen, add in the necessary ports (2 USB, power, and video), 2GB RAM, Wifi, Bluetooth, add in snow leopard. Options for HD or SSD, Voila.

It may be a misdirection on Tim Cook's part to say Apple isn't going to be making a low end phone, I agree that a more compact iphone isn't going to be much less of a premium device than the regular one is.

I definetely get the feeling from his part that smaller phones are cheaper lower end products then the iphone. I think thats because Apple must feel that the screen size for a touch phone must reach X Dimensions for it to be functional. I don't believe Apple will be creating a non touch screen phone hence a iphone nano is not possible as the screen size will be too small to make the software workable.

Or it just sounds like to me they don't think it will be good to put their software on a smaller phone as it would make navigating too hard

I definetely get the feeling from his part that smaller phones are cheaper lower end products then the iphone. I think thats because Apple must feel that the screen size for a touch phone must reach X Dimensions for it to be functional. I don't believe Apple will be creating a non touch screen phone hence a iphone nano is not possible as the screen size will be too small to make the software workable.

Or it just sounds like to me they don't think it will be good to put their software on a smaller phone as it would make navigating too hard

You can actually shave quite a bit of space off the current iphone without reducing the screen size. My guess is the next iphone will be angular, and maybe even move that button behind or to the side. Er actually i shall make a mockup, excuse the bodge i dont have time to polish it.

This design would tie in with some of the behind-the-screen technologies in recent patents .

Or maybe as a bit of showmanship in June Apple could launch the OS, initially minus Jobs, and cap off the event by having him hit the stage with one more thing, i.e. the netbook. It's got Jobs written all over it. I can hardly wait.

They should fake his death just before the event, then have him return as the one more thing himself, maybe wearing a jesus outfit. That would make the headlines. hmm silly idea

they didn't say they would never release one.. there just won't be one coming this quarter. He did say.."We're watching that space". They want to be sure it's not just a fad before they pursue it and I don't blame them. Personally I wouldn't invest in a netbook, I would invest in a macbook pro first. I do need to do mixing with LogicPro and a netbook won't cut it. to me.. the handheld field is potentially greater than any netbook field.

I own a netbook (taht I confess, I tried to get OSX working on). It was a workable (yay, two-finger scroll) but unstable solution. I also spent on the higher side for a large disk, and the resulting laptop was overpriced.

The main problem, stability issues aside, was the completely shitty hardware software integration. The laptop "came" with windows, and the touchpad drivers for XP were ok, but windows XP just completely sucks with a 600 pixel height monitor.

Linux and OSX looked and worked better, but didn't have the customizable drivers (ie, I couldn't turn off the touch-to-click, which resulted in many mistyped docs as there was no room to rest the base of my hands while typing).

I still maintain, as with all slick and feature-rich technology in a smaller form factor, it will command a Higher selling price.

I do not understand why this is so difficult to comprehend.
If Apple is working on an iPhone Nano, will ALL the functionality of the current 3G, Plus it's super thin and smaller, why does everyone expect this will sell for less than $199.00

I would expect it would sell for $399 or higher.

This is EXACTLY how Apple pushes the industry.

Apple would have bragging rights, like with the Mackbook Air.
"Smallest, Thinnest, Smartphone, with All the functionality and more of the current 3G"

Another person who still believes they pay $199 for an iPhone.

An iPhone costs around $600-700, this is taken into consideration when pricing up your phone plans. In places where the networks sell the iPhone without a contract they are charging $700 for the phone.

So a $399 iPhone Nano would indeed be much cheaper and would see most carriers giving it away "free" with a contract.

COOK WROTE :: "You know us, we're not going to play in the low-end voice phone business. That's not who we are. That's not why we're here. We'll let somebody do that, our goal is not to be the unit share leader in the phone industry. It is to build the best phone."

The best phone? Why not include the basic features found on every single phone? Without them, you cant be the best phone. You lack video, MMS, copy and paste, flash etc...

Add these features and you probably got the best phone... Without them, you are a joke.

I think Apple, like Intel, have mistaken what the netbook/travel companion market is.

Intel is afraid that netbooks are canabalizing the sales of laptops (with more expensive and higher profit CPUs). Apple seems to have the same concern.

I believe they are both mistaken in their beliefs.

From what I have seen and based upon conversations with people purchasing them, I have concluded that the largest group of people are those who were not shopping for a conventional notebook at all. They specifically wanted something like the netbook which is small and easy to carry and did not need a powerful laptop for its intended uses which would mostly be to check email and send a few pictures to family/friends when traveling.

The size and weight seemed to be the most important consideration. If these devices are canabalizing anything, it would be so called smart phones, which are not very smart at all in the experience of a lot of people.

Intel's sales/revenue are down. True, but the Atom processors have been a bright spot. People are purchasing the netbooks in addition to a more powerful laptop.

There is also something fun about these things from the responses I have received.

The price points are important, at least in part, because these devices are competing with wireless telephone handsets. The fact that people will be dragging them around with on the occasions when they simply do not want to be burdened with all that a conventional laptop entails reinforces my conclusion that netbook sales are in addition to laptop sales.

Let's face it, the Atom - Ion platform will enable people to watch movies, including HD, do a limited amount of photo editing to get things ready to email and stay in touch.

Both Intel and M$ are trying to screw up this market with their inane restrictions and some of the manufacturers are beginning to respond by moving to completely different processors so they had both better watch out or it could be that instead of having problems delivering all the Atoms that are being ordered, Intel could lose those sales as well. M$, for their part, is trying to shove Vista down everyone's throats with their restrictions on the hardware XP can be installed on. Let's face it. Reports are that Vista chokes these little machines to death. Now M$ is trying to push a stripped down version of Vista that is unlikely to make anyone happy. On the other hand, Windows 7 beta is reported to be working well on these machines. Hint to M$: let people have XP until Win 7 is ready!

You probably have been wondering when I was going to talk about Apple. Well, they have been left out because they just don't get it. They also will miss sales to Mac users who like the device enough to buy it without it being an Apple product. Apple appears to simply not care about being a part of the new market segment. It will be their loss.

Tranlated from AppleSpeak: "Apple will offer a "premium" NetBook soon at slightly above the $500 price point.". It is likely that Apple will offer a display with higher resolution (similar to the new HP 2140) instead of the 1024x600 LCD found in many low-end NetBooks. It is also likely that the Apple netbook will be based on a dual core Atom with the new NVidia chipset.

Of course, Apple will claim that the new Apple netbook is not a "netbook"...

Translate from AppleSpeak "You will buy what we give you and you will like paying a higher price for it."

How do you get from "low-end voice phones" to that meaning iPhone nanos??!! What rubbish! The question asked wasn't even about an iPhone nano, it was about markets like India wanting a mass of cheap phones.

Most people requesting and iPhone nano have wanted it to still be a smartphone, but with a few less features (eg WiFi and GPS) to reduce its cost. It might also be a little smaller but not enough to make the virtual keyboard too small. All the rumors also suggest it will still be a smartphone.

An iPhone nano would never compete in the "low end voice phones" market. That's the junk market - of course Apple wouldn't compete there.

The iPhone nano on the other hand would compete in the mid range of the smartphone market.

So to suggest that this statement by Tim Cook rules out the iPhone nano is utter nonsense and suggests the writer couldn't wait to say "I told you so" and forgot to analyze the comment and its context.